For roughly three decades, China’s booming economy has offered consumer product companies some of the world’s greatest growth opportunities. China’s economic slowdown and jittery markets have raised worries that this growth story is drawing to a close. In early November 2015, for example, the government lowered its official five-year annual GDP growth target to 6.5%, the slowest pace since the 2008–2009 global financial crisis.

China’s economy is indeed struggling through a significant structural transition, and consumption isn’t rising as fast as it did during the peak boom years. But make no mistake: although the pace is slower and the course is bumpier, consumption growth is still tracing a staggering trajectory. China’s consumer economy is projected to expand by about half, to $6.5 trillion, by 2020—even if annual real GDP growth cools to 5.5%, below the official target. The incremental growth of $2.3 trillion alone over the next five years would be comparable to adding a consumer market 1.3 times larger than that of today’s Germany or UK. (See Exhibit 1.)

The Chinese consumer market, moreover, is in the midst of a transformation that offers tremendous new opportunities. Three great forces are ushering in this transformation: the rise of upper-middle-class and affluent households as the drivers of consumption growth; a new generation of freer-spending, sophisticated consumers; and the increasingly powerful role of e-commerce.

Research by The Boston Consulting Group and AliResearch, the research arm of Alibaba, China’s largest e-commerce company, found that these three forces of change will profoundly reshape China’s economy and consumer market over the next five years. Through 2020, 81% of consumption growth will come from households whose annual income is more than $24,000. Furthermore, consumers 35 or younger will account for 65% of growth. E-commerce will become a far more important retail channel, driving 42% of total consumption growth, 90% of that growth coming from mobile e-commerce.

The types of products fueling China’s consumer boom will also change. Services will overtake goods as the chief engine, accounting for 51% of incremental growth over the next five years. Demand for premium goods and services that enhance a personal sense of well-being—such as healthy foods, education, and travel, rather than daily necessities—will accelerate.

Companies will need a new playbook to capture the coming wave of growth. The strategies of the past will no longer be relevant.